Pirelli Tyre has started tyre manufacture in Europe. The plant will produce top-of the- range tyres for cars and SUVs (Sport Utility Vehicles) and is located close to the steel-cord facility opened last year. The new plant, one of the world’s most modern tyre production facilities, applies leading-edge non-robotised production technologies and has been designed for producing high-performance tyres – a sector where Pirelli Tyre is a leader – including the Company’s Winter, High-Performance, Ultra-High-Performance and SUV range.

The industrial complex, including the steel-cord facility, covers an area of 500,000 square meters and by the year end will employ approximately 770 personnel, of which about 450 in tyre production. Output in 2006 will be 300,000 tyres, rising to 2 million in 2007. The new facility, when fully operational, will have an annual output capacity of 4.5 million high-performance tyres with a workforce of about 1,000. The total investment is approximately EUR 170 million.

The new plant represents for the Pirelli Group a key industrial location. The new car-tyre and the steel-cord facilities are global assets in Pirelli’s industrial strategy. This plant will in time become one of the world’s biggest production centres for car tyres, and enable Pirelli to step up its output capacity in response to market demand in the top-end segments, which are rapidly expanding both in Europe and in the rest of the world. The complex is strategically located for serving markets in both Western and Eastern Europe, where the big car makers are increasingly adding production capacity. Exports will exceed 90% of output. In addition Pirelli strongly believes that in the next few years Central and Eastern European countries will become a major market for high-performance tyres. Local demand is set to exceed 10% per year. Consequently, Pirelli intends to develop the potential of the plant area by setting up, alongside its industrial operations, a platform of logistics, data-processing, and sales services to support expansion in these countries.

The new plant in Olt operates the best equipment on the market, further enhanced with modern process innovations patented by Pirelli. The plant features the very latest in Pirelli Tyre non-robotised production technology and highly sophisticated control and management systems. The entire workforce and almost all office staff at the facility have been recruited locally. As is the Company’s custom, Pirelli has plans for a series of initiatives in Olt to promote the training and welfare of its personnel and their families and, more generally, to benefit the local community. In particular, a cooperation agreement has been signed with Craiova University for an intensive training project based on post-graduate courses and joint research projects. Further, a number of educational and assistance initiatives for young children and professional training for young people are under Consideration.

Start-up of tyre production in Romania strengthens the international presence of Pirelli, which was first established in Spain in 1902 and now counts 24 production facilities in 12 countries worldwide, in addition to an extensive sales and distribution network that stretches across 160 countries in all five continents.

Pirelli tyres are marketed in Oman by their authorized sole distributor General Trading Enterprises LLC an OTE group of company with strong distribution and service network spread across Oman.